Underground Construction - June 2017 - 6

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anes,

INSIGHT SERVICES

pipes, pumps, meters, EPC services). The remaining 37%
feature utility
KNOWLEDGE
CENTER
network & distribution assets, including 113 investor-owned utility
acquisitions in the U.S. and transfers of equity stakes in water treatment

NEWSLINE LATEST INDUSTRY DEVELOPMENTS

systems (e.g. desalination plants).
Exhibit: Number of Deals by Segment and Disclosed Valuation Totals

Water Sector M&A Tops $57 Billion

Mergers and acquisitions (M&A) in the global water sector exceeded $20
billion in 2016, pushing the three-year total valuation of announced deals
to more than $57 billion, according to Bluefield Research's new report,
Water Mergers & Acquisitions: Key Trends in a Changing Global Landscape.
The in-depth analysis of 447 transactions since 2014 highlights key shifts
in the competitive landscape as companies position to address increasing
municipal and industrial needs for water and wastewater infrastructure
solutions.
"The types of deals and breadth of companies building out positions by
acquisition are positive signals for water sector growth," reported Reese
Source: Blue�eld Research
Tisdale, president of Bluefield Research. "Broader market forces, including
the U.S., micro-pollutant treatment in Europe, or mining sector demand
poor water quality in Flint, growing population demands, and increasing
for alternative water supplies in Chile, water treatment and management
Over the last three years, the lion's share of activity has been executed by
risks to industrial company bottom lines, whether they be in energy, power,
solutions are becoming more sophisticated and economically attractive.
moving to expand
their positions
across
the water
brewing or mining, underpin deal flow among companies angling to be at strategic
As abuyers
result, consolidation
of advanced
technology
suppliers
will gain
industry.
At the topglobally,
of this list
is Suez'sbuyers
$3.4 billion
GE
the forefront of this change."
momentum,
as strategic
look toacquisition
expand theirofportfolios
Bluefield's analysis uncovered several key trends that signal far-reaching Water,through
acquisition.
the largest
pure-play water deal to date. This blockbuster deal,
impacts on the competitive landscape going forward:
* Consolidating
EPC72
sector
impacting
water.highlights a
Over the past 36 months,
which
drew a reported
interested
parties,
* U.S. remains epicenter of deal ﬂow. Of the 447 deals analyzed, 265
leading engineering design firms have participated in more than $11.7
widespread focus on North America and the opportunities for growth in
targeted companies are headquartered in the U.S. The $1 trillion infrabillion of deal flow to recast their footprints, and changed the competisupporting
the industrial
structure investment proclamations by the Trump administration, public
tive landscape
amongsector.
leading service providers.
concerns about water quality, and municipalities' need to do more with
* Japanese, emerging Chinese players navigating globe. A growing roster
also seeing
heavy deal
�ow among
engineering
and construction
less financially has bolstered investment sentiment towards technologies"We are
of critical
infrastructure
investors
has secured
beachheads
in global
�rms, which
play
a pivotal
role the
in water
infrastructure
These
focused on efficiency and private participation.
hotspots,
including
Brazil,
U.K., Australia
and theprojects.
Middle East.
This
* Advanced technology solutions usher new wave of growth opportuni- companies
activity
could
have
longer-term
impacts
on competition
forenergy,
technology
are
often
diversi�ed
across
multiple
sectors (e.g.
power,
ties. Whether reclaimed wastewater for municipal and industrial reuse in water),and
utility
ownership
going
forward.
making Stantec's 2016 acquisition of MWH Global unique.
Because of MWH's water sector focus, it thrust Canada-based

Continue
To Be One Ofservices,
The
Stantec into a global leadershipPipelines
role for water
and wastewater
Rental Industry 5-Year Forecast Sees $59.4 Billion In Revenue
The new five-year forecast for equipment rental
industry revenues released by the American Rental
Association (ARA) continues to call for steady
gains, and expectations for growth are greater than
in the February forecast.
ARA now projects U.S. equipment rental revenue
to reach $49.4 billion in 2017, up 4.5 percent over
last year. The forecast calls for U.S. rental revenue
to grow - 4.7 percent in 2018, 5.1 percent in 2019,
4.6 percent in 2020 and 4.4 percent in 2021 -
to reach $59.4 billion combined for the three
segments of the industry, including construction/
industrial, general tool/light construction and
party/special event.
This is the second consecutive quarterly forecast to project stronger growth compared to the
previous quarterly update of the ARA Rental Market
Monitor subscription service by IHS Markit, the
economic forecasting firm that compiles the data
and analysis as part of a partnership with ARA and
Rental Management.
"Equipment rental continues to post strong
performance numbers with annual revenues
closing in the $50 billion mark this year," said John
McClelland, ARA's vice president for government
affairs and chief economist.
"The issues going forward are how the Congress
is going to deal with tax reform and infrastructure

ucononline.com

Safest Ways To Transport Energy

overnight.
" says
spending. If tax reform
can lower
ratesTisdale.
and simplify
The American Petroleum Institute (API) and
the code for all businesses, that could be a sign of
Blue�eld's analysis of deals across
the industry
chain(AOPL)
has uncovered
Association
of Oilvalue
Pipe Lines'
"Pipeeven stronger growth; and a strong infrastructure
line Safety Excellence
Performance
Report
several
key
trends
that
signal far-reaching
impacts
on
the
competitive
bill will add to that momentum," McClelland said.
and Strategic Plan 2017-2019" summarizes
landscape
going IHS
forward:
Scott Hazelton, managing
director,
Markit,
the industry's track record and outlines ways
says weak first-quarter numbers for the U.S. gross
to advance safety efforts throughout the
domestic product (GDP) masked solid demand
pipeline supply chain.
for investment, which will help fuel growth in
According to the report, the number of
equipment rental revenues.
incidents in 2016 decreased 10 percent
Despite sluggishness in nonresidential construc- from 2015 levels. "Pipelines are one of the
tion, contractions in real residential construction
safest and most efficient ways to transport
and uncertainty of additional infrastructure spend- liquid energy," said API Pipeline Manager
ing, the construction and industrial equipment
David Murk. "While nearly 100 percent of
segment, and general tool rental segment are
crude and petroleum products reach their
destination safely, the industry remains
projected to achieve compound annual growth
committed to zero incidents."
rates (CAGRs) of 4.1 percent and 6.1 percent,
The Performance Report/Strategic Plan
respectively, between 2017 and 2012, according to
acknowledges
where challenges remain
the ARA Rental Market Monitor.
and areas for improvement, highlights the
In Canada, the five-year forecast calls for
public benefits of pipelines, and explains
accelerating revenue growth each year, starting
what pipeline operators are doing to protect
with a 2.7 percent increase in 2017 to reach $5.12
the public and the environment.
billion. Total rental revenue is expected to grow
"This plan will help drive advances in
another 3.1 percent in 2018, 4.2 percent in 2019,
pipeline safety technology, strengthen
5.3 percent in 2020 and 5.9 percent in 2021 to
emergency preparedness and response
reach $6.13 billion.
planning, and encourage the adoption
of holistic pipeline safety management
FOR MORE INFORMATION:
systems," said Murk.
American Rental Association, (800) 334-2177, ararental.org

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Underground Construction - June 2017

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